WILFREDO DAVID, 

petitioner,
vs.
COURT OF APPEALS, JULIO MANALILI, ARCADIO BALAGTAS, MARTIN
PASCUAL, RICARTE SUPAN, FIDEL LIWANAG, MATIAS DIZON, NARCISO
LUMBA, DANIEL SUPAN and CIRIACO REYES, respondents.
G.R. No. L-57719-21 May 6, 1988

Fact:
The nine [9] private respondents herein were share tenants of Patricio
David in his 36-hectare land in barangays San Pablo and San Agustin in
Magalang, Pampanga. Each tenant had a landholding ranging in area from
four to five hectares devoted entirely to the production of sugarcane which
were ultimately milled and processed into sugar by the Pampanga Sugar
Development Company [PASUDECO] in San Fernando, Pampanga.
Effective in the 1979-80 agricultural year, Patricio David leased his
sugarland to his son, Wilfredo David. For said year, Wilfredo shared with the
tenants the net proceeds of the sugarcane produced on the 50%-50%
arrangement. As early as August 15, 1979, herein private respondents
notified Wilfredo David of their intention to elect the leasehold tenancy
system starting from agricultural year 1980-81. 1 Wilfredo David objected
not only because he had prepared for said agricultural year by applying for a
crop loan from the Philippine National Bank but also because he believed
that his tenants were financially incapable to undertake the venture.

Issue:
Whether or not, the respondents can change the leasehold tenancy
system

Ruling:
While it is true that there have been no presidential proclamations to
the effect that measures have been adopted to insure efficient management
of the agricultural and processing phases of crops covered by marketing
allotments, it would be nothing short of regressive to deny sugarland share
tenants of their right to elect the leasehold system. Considering the policy of
the government as enunciated in Section 4 of the Code as amended, which
mandates the automatic conversion of share tenants to leaseholders,
individual sugarland tenants should not be discriminated against.
Another development worth mentioning is the fact that to give more
teeth to the policy of automatic conversion of share tenancy to the leasehold
system, Presidential Decree No. 1425 was issued to strengthen the
prohibition against agricultural share tenancy by providing penalties for
violation thereof. We may add that more recent developments portend the
transformation of tenants to owner-farmers.
Both issuances state that all public and private agricultural lands shall
be covered by an agrarian reform program. In the instant case, We can do
no less than to apply a liberal interpretation of the Agricultural Land Reform
Code to give full force and effect to its clear intent which, under Section 2[2]
and [6] of said Code, is "to achieve a dignified existence for the small
farmers" and to make them "more dependent, self-reliant and responsible
citizens, and a source of genuine strength in our democratic society." 9

WHEREFORE, the instant petition for review on certiorari is hereby denied.

No costs.